Study: Readers distrust ads that look like news

Consumers say news sites lose credibility when running "sponsored content" dressed up to look like real articles, a survey by a producer of such content finds. (Unless you're Fox News, which was rated by survey takers as less trustworthy than the advertorials were.)

Media critics have long denounced sponsored content—articles paid for by advertisers that look like real journalism—which they say blurs the line between advertising and editorial. Marketers, meanwhile, love having smart, engaged consumers reading these "branded" stories that bolster the bottom lines of publishers everywhere from Mashable and Buzzfeed to the online editions of The New York Times and The Wall Street Journal.

As it turns out, the critics weren't just making stuff up: slightly more than half of consumers don't trust sponsored content and 59% believe a news site loses credibility if it runs articles paid for by a brand, according to a study by Manhattan-based startup Contently. And two-thirds of respondents are less likely to click on a branded article than on the site's regular editorial product.

The report, "Study: Sponsored Content Has a Trust Problem," by Contently Editor-in-Chief Joe Lazauskas, was released Wednesday.

Contently, which produces content for brands, surveyed 542 U.S. readers of different ages and educational levels, and also found that only about half were clear about exactly what "sponsored content" was.

Among the survey's other findings: the more educated the consumers, the more likely they were to say they felt deceived when they realized a piece of content had been sponsored by a brand. And majorities of both Millennials and Baby Boomers—the age span of respondents was 18 to 65—agreed that they preferred banner ads to sponsored articles.

There was one bit of good news for branded content: It was considered more trustworthy than Fox News. (MSNBC squeaked by as slightly more trustworthy than either one.)

Though most of the content produced by Contently's army of freelancers is destined for brand sites, not news sites, the company might still be considered an odd source for a study critical of the advertorial concept. But apart from the report being a bit of content marketing itself, Contently would like to see improvements in the branded genre.

"Part of what we try to do, in an effort to be credible brand publishers ourselves, is take a skeptical look at the marketing landscape," said Co-Founder and Chief Creative Officer Shane Snow. "We do ourselves a disservice if we pretend things are great when they're not."

Aside from making it absolutely clear which content on a site is sponsored and what that means, Mr. Snow believes the solution to building trust with readers is to publish better branded articles.

"Brands need to do sponsored content that people don't just tolerate but actually enjoy," he said. "For us, as a company that brokers the talent and technology to do this, [better content] will mean better rates and assignments for people doing this work."

Contently's next study, coming in a few weeks, will look at which sites do the best job of publishing branded content that resonates with readers without confusing them about what it is.